MARCH 2017 BAD FAITH CASES: BAD FAITH CLAIM SUFFICIENT WHERE PLAINTIFF PLEADED SEVERE INJURY AND DAMAGES IN EXCESS OF $300,000 POLICY LIMIT, AND, AT MOST, INSURER OFFERED $7,500 NEARLY FOUR YEARS AFTER THE ACCIDENT (Philadelphia Federal)

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The insured pleaded that he was severely injured in an automobile hit and run. He had multiple surgeries and was still disabled and completely unemployed four years after the incident, at the time of the complaint. He sought the $300,000 uninsured motorist policy limit. The insurer alleged it made a $7,500 offer approximately four years after the incident, which the insured asserts was not made. In either event, the insured asserted bad faith because either there was no offer, or an unreasonably low offer was made.

The court refused the insurer’s motion to dismiss the bad faith claim.

The court focused on the allegations that the insured remained completely unemployed; that there were no facts suggesting he was at fault in causing the accident; that he paid his premiums; that the applicable policy limit was $300,000; and that he was seriously injured as a result of the accident.

The court stated that: “Viewing these facts in a light most favorable to the plaintiff, as I must, it does not matter whether [the insurer] made no offer at all or a $7,500 offer. Either offer would be unreasonably low given that [the insured] has been out of work for over four years and undergone multiple surgical procedures and other medical treatment in the interim. These facts point to [a] lack of a reasonable basis in its complete (or almost-complete) denial of benefits.”

The court also observed that the offer, if made, was nearly four years after the accident. Thus, delay was placed at issue.

The court further observed that the insured alleged his actual damages exceeded the $300,000 policy limits.

Date of Decision: January 10, 2017

Davis v. Nationwide Mut. Ins. Co., No. 16-3878, 2017 U.S. Dist. LEXIS 3583 (E.D. Pa. Jan. 10, 2017) (Stengel, J.)

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